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It is not uncommon having worked for many years to find yourself in retirement, having paid off your mortgage, with a disposable income which is far from ideal. With retired homeowners owning a collective £1 trillion of un-mortgaged equity in property* you are not alone. There are a number of options you could consider when trying to increase your income in retirement of which Equity Release is just one.

There are two main types of Equity Release agreements – Lifetime Mortgages and Home Reversion Plans.

We understand that given the nature of Equity Release, everyone has different concerns and priorities and as such invite you to get in touch for more information or to discuss your own circumstances confidentially and in detail.

download a FREE Impartial Guide to Equity Release click here.

*source: www.cml.org.uk April 2006

What is Equity Release?

Equity Release agreements are long term solutions designed to help certain homeowners release part or all of the equity in their home.

This can be achieved either by way of taking a one off lump sum, taking smaller lump sums periodically or by taking a monthly income for life.

Whilst rules vary from provider to provider, there are a few general guidelines which tend to apply throughout, such as - the homeowner:

• Being over a certain age, typically 50 to 60
• Having a property worth a minimum of £30,000 to £50,000
• Looking to raise at least £10,000 to £30,000
• Being ideally mortgage free, although a small mortgage could be repaid from the equity released
• Owns a property of standard construction which is either freehold or subject to a long lease
• Owns a property which is in a good state of repair, although the equity released can be used to fund any essential repairs required by the equity release provider
• Must not have tenants or any other people living at the property who would have rights under The Rents Act

Is Equity Release for me?

The Positives

• You could release a substantial amount of capital from your property without having to move
• With some agreements you can choose to release some funds now and some in the future
• You can spend the capital raised however you wish
• You can continue to live in the property for as long as you wish
• With many schemes you will benefit from any future rises in property value
• With some agreements rather than taking a lump sum from the property value, you can opt for a monthly income

Things to be aware of

• There will be less and in some cases no inheritance to leave to your family
• As accrued interest is continually added to the outstanding loan balance, the longer your agreement is running, the more equity is used up. Ultimately this will leave a reduced surplus when you or your estate sells the property
• Subject to age amongst other factors it may only be possible to release around 20% of the property value which may not be enough to satisfy your requirements
• Agreements can be inflexible and should only be considered as a long term option
• Equity Release schemes can be expensive although interest rates charged are now closer to those seen on conventional home loans
• Releasing equity may affect your entitlement to State benefits